The banking sector is set to prioritise supporting businesses to speed up economic recovery. — VNS Photo

HCM CITY — Support for the business sector, improving credit quality and tight control of credit to high-risk sectors are among its priorities for HCM City this year, the State Bank of Vietnam has said.

Võ Minh Tuấn, director of the central bank’s city branch, said credit growth in the city last year was lower than in 2022 at 9.77 per cent.

Under the Government’s 2 per cent interest subsidy programme, banks offered customers subsidies of VNĐ 390.06 billion (US$15.9 million) on loans of VNĐ 24 trillion, he said.

They restructured and rolled over loans worth VNĐ40 trillion ($978.3 million) for over 37,000 customers, he said.

Though the economic outlook for the country and city is improving, headwinds persist, according to the bank official.

Banks will continue to help industries meet their funding needs with a focus on those driving economic growth, as directed by the Government and the city.

While loan interest rates have dropped sharply, businesses want further cuts to help them to overcome their difficulties.

Phan Đình Tuệ, vice chairman of the HCM City Union of Business Associations, said enterprises, especially small and medium-sized ones, had faced difficulties due to the decline in global consumption.

That combined with high interest rates had exhausted businesses.  

"Businesses do not dare to borrow from banks though access has been improved. Banks are also looking for borrowers. So banks need to continue to share difficulties with businesses by sacrificing part of their profits to further cut lending interest rates. Loan interest rates have decreased compared to the beginning of 2023, but to revive the market, businesses need more support from banks."

Speaking at a conference held to discuss implementation of tasks in 2024 held by the SBV’s HCM City branch last week, Nguyễn Văn Dũng, vice chairman of the city People's Committee, said though the credit growth rate last year was lower than in 2022, disbursement was redirected into the city’s key production, trading and services sectors.

The city was determined to implement digital transformation plan and the National Assembly’s Resolution 98/2023  this year, he said.

The banking sector needed to join hands with the city for digital transformation activities and accelerate its digital transformation, he said.

The city was also focusing on becoming a regional service hub and international financial centre, and the sector needed to also support this, he said.

He urged the central bank to maintain a flexible exchange rate and management policy for the city’s businesses to increase exports. — VNS